CleanSpark‘s (NASDAQ: CLSK) shares slid 6% on Aug. 9 after falling short of analysts’ revenue estimates in its latest earnings report. The low-carbon Bitcoin (CRYPTO: BTC) miner’s revenue grew by an impressive 129% year over year to $104.1 million in the third quarter of fiscal 2024 (ending June 30), missing expectations by $6.8 million.

The company saw its net loss widen from $14.1 million to $236.2 million, or $1.03 per share, also falling short of the anticipated loss of $0.04 per share. Additionally, its adjusted EBITDA plummeted to a negative $12.7 million from a positive $13.3 million a year ago.

Image source: Getty Images.

So, amidst these disappointing figures, should investors view CleanSpark’s post-earnings decline as a fortuitous buying opportunity? Let’s delve into this Bitcoin miner’s distinctive business model and weigh the rationales behind buying, selling, or holding its stock.

The Green Side of Bitcoin Mining:

CleanSpark stands as the world’s third-largest publicly traded Bitcoin miner, trailing Marathon Digital (NASDAQ: MARA) and Riot Platforms (NASDAQ: RIOT). What sets CleanSpark apart is its reliance on renewable energy sources like wind and solar for its modular microgrids, a stark contrast to larger miners utilizing coal-fired plants.

These microgrids optimize low-carbon energy sources by integrating them into storage systems, generators, and load management solutions. They can function autonomously or as part of larger grids, offering cost and emission reductions.

Initially not in the Bitcoin mining game, CleanSpark transitioned post-acquisition of ATL Data Centers in May 2021, enhancing ATL’s mining facilities with its microgrid technology to showcase Bitcoin mining with eco-friendly energy solutions. Further acquisitions and enhancements boosted CleanSpark’s profile, coinciding with escalating energy costs, heightened scrutiny on coal-powered mining, and Bitcoin’s recent halving – factors contributing to CleanSpark’s stock nearly doubling in the last year. Marathon saw modest 20% growth and Riot slumped by close to 50% during the same period.

Securing Sustainability:

Typically, Bitcoin miners measure growth via mining efficiency – quantified in exahashes per second (EH/s) – and their Bitcoin holdings. Since acquiring ATL Data Centers, CleanSpark has witnessed substantial spikes in both metrics.

Metric	FY 2021	FY 2022	FY 2023	9M FY 2024
Hashrate	1 EH/s	4 EH/s	10 EH/s	22 EH/s
Bitcoin Assets Held	$27.5M	$11.1M	$56.0M	$413.0M

Data source: CleanSpark. Fiscal year ends in September.

Notwithstanding sizeable GAAP losses accumulated from strategic acquisitions, CleanSpark has shown promising growth in adjusted EBITDA alongside surging revenue.

Metric	FY 2021	FY 2022	FY 2023	9M FY 2024
Revenue	$49.4M	$131.5M	$168.4M	$289.7M
Adjusted EBITDA	($3.5M)	$32.5M	$25.0M	$238.2M
GAAP Net Income	($22.0M)	($57.7M)	($136.7M)	($87.0M)

Data source: CleanSpark.

Despite Bitcoin’s price volatility, with only a 30% increase over three years, analysts predict a 150% revenue surge to $423.6 million and adjusted EBITDA rise to $291.8 million for CleanSpark this year. While these projections hinge on Bitcoin’s price swings, the stock seems attractively priced at 6 to 8 times this year’s revenue and EBITDA estimates.

Marathon trades at 8 and 12 times revenues and adjusted EBITDA, respectively, while Riot deals at 5 times sales and 8 times EBITDA for the current year.

Time for Action?

Unveiling the Potential of CleanSpark

Those skeptical about Bitcoin’s future may advocate for selling CleanSpark, but for the enthusiasts who foresee a bright future for the cryptocurrency, holding onto CleanSpark stock could be a lucrative move. Positioned as an undervalued growth play, it stands poised for significant upside potential in comparison to conventional coal and fossil fuel-powered competitors. While categorized as a speculative stock, the possibility for substantial gains exists for investors with the patience to weather fluctuations over the next few years.

Exploring Investment Opportunities in CleanSpark

Prior to diving into CleanSpark, it’s crucial to ponder these aspects:

The investment gurus at Motley Fool Stock Advisor might not have included CleanSpark in their list of 10 best stocks for current investment opportunities. However, upon reflection on historical data, likened to the groundbreaking addition of Nvidia to their list on April 15, 2005, the potential for monumental returns is undeniable. A mere $1,000 investment at the time of their recommendation for Nvidia would have blossomed to a staggering $668,029.*

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